HCL is the fourth largest outsourcing company in India
INDIA’S fourth-biggest outsourcing company, HCL Technologies, reported on Wednesday (July 25) a 67 per cent jump in quarterly net profit from a year earlier as client orders surged.
HCL notched up a net profit of Rs8.5bn ($151m/£96.27m) for the April-June period, its financial fourth quarter, on sales that grew 38 per cent to Rs59.2bn ($1.06bn/£67m).
HCL, which has been aggressive in pursuing new business, beat market expectations that it would post a profit of around Rs7bn ($126m/£80.40m).
“HCL reported numbers that were ahead of expectation,” said Rikesh Parikh, Vice president of Markets Strategy at India’s Motilal Oswal Securities.
“Contrary to other IT majors, HCL has been able to win deals and maintain margins,” Parikh said.
Shares of the company, India’s fourth-largest outsourcer by sales, climbed nearly seven per cent to hit a two-month high of Rs513 ($9.24/£5.88) on the back of the results.
Earnings of India’s biggest outsourcing firm, TCS, also beat analysts’ estimates earlier this month.
But the country’s second and third-largest outsourcing firms, Infosys and Wipro, are facing headwinds in boosting sales as the downturn in their main US and European markets prompts many customers to go slow on concluding deals.
India’s flagship outsourcing sector carries out a wide range of jobs for Western companies, such as answering bank customers’ calls, processing insurance claims and software development.
The country’s software firms derive over 85 per cent of their revenues from the US and Europe.
India, with its large less expensive English-speaking workforce, accounts for at least 50 per cent of the global outsourcing market.
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